In the current macroeconomic debate, considerable attention is being focused on the public debt to GDP ratio with some mainstream economists claiming that a ratio of 80 per cent is a dangerous threshold that should not be passed. They therefore advocate that governments run primary surpluses (taxation revenue in excess of non-interest government spending) to start reducing the debt ratio. Modern monetary theory tells us that while a currency-issuing government running a deficit can never reduce the debt ratio it doesn't matter anyway because such a government faces no risk of insolvency.
Answer: False
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